Chapter 4 : Economic systems and market methods (New markets : One of…
Chapter 4 : Economic systems and market methods
New markets : One of goals of managers is to tracks the changes on the market :
Countries differ in various ways
Economic and Political changes : Indeed this factors alter the market
Connections, change & consequences : Globalization connects countries and acts of countries have externalities on the others.
Challenges of the Comeback
Choices of citizens, Policymakers & institutions
The assessment of economic environments is often more conditional than universal because :
Economic freedom : Absolute right of property ownership, fully realized freedoms of movement for labor, capital, and goods, and an absolute absence of coercion or constraint of economic liberty beyond the extent necessary for citizens to protect and maintain liberty itself.
Economie freedom scale
70 - 79.9 Mostly free : Canada, USA, Sweden, Ireland, Germany ...
60 - 69.9 Moderatly free : Mexico, France, Spain ...
80-100 Free : Switzerland, Australie & New Zealand
Type of economic systems
Mixed : Government and private ownership of economic ressources mixed in varying proportion.
Command : Government owns most or all ressources.
Ex : Communism
Market : An economic system whereby individuals, rather than the government, make most decisions
is a market economy.
Measures of economic performance
GNI (Gross National Income)
GDP (Gross domestic product)
GNP (Gross National Product)
Purchassing Power Parity
Rate of Economic Growth
Economy's sustainability and stability should be a concern for managers
Sustainability : Concern for the ecological welfare of the world spurs calls for green measures of growth that expands analysis beyond narrow measures of monetary aggregates. Green economics holds that each country is a component of, and dependent on, the natural world.
Stability : Policymakers have long puzzled over a paradox that questions the validity of monetary aggregates as performance measures.77 Namely, people in rich countries do not appear to be any happier than people in poor countries.
Inflation : is the sustained rise in prices measured against a standard level of purchasing power.